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Court of Appeal:
Punitives May Be Predicated on Uncompensated Damages
By a MetNews Staff Writer
The Court of Appeal for this district yesterday upheld a judgment in a wrongful-discharge case which includes a $500,000 punitive-damage award—33 percent higher than the $15,057 in economic damages that were assessed—with the opinion proclaiming that a Los Angeles Superior Court judge appropriately took into account that the employee would have collected noneconomic damages had she not died.
Justice Maria E. Stratton authored the opinion which upholds a judgment by Los Angeles Superior Court Judge Randolph Hammock.
The action was brought by Maria Teresa Lopez who claimed she was fired because she had developed cancer. She died during the first trial; a mistrial was declared; Lopez’s three children maintained the action at the second trial. Under Code of Civil Procedure §377.34, where the plaintiff has died, damages for pain and suffering are barred.
There was testimony that Lopez was distraught over the termination of her employment and conduct toward her preceding the firing including a supervisor taking credit for her sales, creating the false impression that her sales were slipping.
Hammock’s View
Hammock’s view was that “[b]eing fired for some bogus reason, obviously, can create emotional distress” and that “the non-economic damages that were not awarded” in light of §377.34 would otherwise have been “justified” and should be a "factor” in setting punitive damages.
Stratton agreed, saying in yesterday’s opinion:
“We agree that a punitive damages award based on such a large multiplier would be troubling. Plaintiffs contend, however, that the comparison should be to the total harm caused by appellants, which included $100,000 to $150,000 in noneconomic harm plaintiffs could not recover after Lopez’s death due to the provisions of section 377.34.2 Such a comparison would result in a multiplier of 3.3 to 5.”
High Court Case
The justice pointed to the California Supreme Court’s 2005 opinion in Simon v. San Paolo U.S. Holding Co., Inc There, a $1.7 million punitive-damage award was invalidated where compensatory damages were set at $5,000, but the opinion by then-Justice Kathryn Werdegar (now retired) contains statements such as:
“[A] large number of federal and state courts have, in a variety of factual contexts, considered uncompensated or potential harm as part of the predicate for a punitive damages award.”
The former employer, CIA Wheel Group (“CWG”), contended the statements in Simon that were pointed to by Lopez’s successors in interest were dicta.
“Perhaps,” Stratton responded.
No Further Cases
She continued:
“They also contend that Lopez has not cited any California case since Simon which has considered uncompensated damages as the predicate for a punitive damages award. The reverse is also true: appellants have not cited any California case since Simon reversing a punitive damages award because it was predicated on uncompensated damages.
“Appellants do not point to any flaw in the Simon court’s reasoning, or any inconsistency with U.S. Supreme Court decisions, and we see none, at least as that reasoning is applied to the case of an individual who suffers noneconomic damages but dies before trial in California.”
Stratton said there was ample evidence in the record that Lopez did suffer emotional harm as the result of the defendants’ conduct.
Reprehensibility of Conduct
She went on to say:
“Given the medium high level of CWG’s reprehensibility, and the unusual situation where plaintiffs could not recover for Lopez’s emotional distress, we have no difficulty in concluding the $500,000 is constitutionally permissible. Lopez’s actual harm was in the $115,057 to $165,057 range. Taking the mid-point of $140,057 results in a multiplier of 3.5. That is not excessive in light of CWG’s despicable conduct toward a seriously and ultimately terminally ill woman.”
The case is Rubio v. CIA Wheel Group, 2021 S.O.S. 1564.
Stacie D. Yee and Justin L. Brossier of Pillsbury Winthrop Shaw Pittman represented CWG. V. James DeSimone and Carmen D. Sabater of V. James DeSimone Law acted for Lopez’s sons.
Copyright 2021, Metropolitan News Company